It is with great regret that I must announce my first failure in the world of business, after Smarter Housing Limited was struck off Companies House further to ‘public interest’ proceedings.

This is particularly frustrating as I founded Smarter Housing in 2005 in an attempt to raise the standard of student accommodation and put huge amounts of effort into ensuring unrivalled levels of service. Looking at the company in 2008 you would have seen a prosperous young enterprise, managing one of the largest student property portfolios in the West Midlands.

Smarter Housing had a fantastic reputation amongst students which allowed us to let properties extremely quickly. Happy landlords were more than willing to refer our services and we quickly expanded from a handful of clients in Leamington Spa to manage properties as far apart as Birmingham and Nottingham.

As recognition of my early efforts, I found myself working with the Government backed ‘Make Your Mark’ campaign, helping the next generation of entrepreneurs to turn their ideas into reality. In addition, I received national press coverage along with my induction into the Courvoisier Future 500 (CVTF500) and even found myself quoted by former ‘dragon’ Doug Richard in an article on business survival.

Sadly, in August 2008 I found myself faced with personal problems that required my immediate attention. My decision to appoint an office manager was not thought through properly and, out of her depth without my management input, she oversaw what can only be described as a catastrophic failure.

In defence of my office manager, who shall remain anonymous, to this day I am convinced her actions were not malicious. Sadly the same cannot be said about two other employees. Margaret Bearman felt she was entitled to cash being brought into the office, faked an armed robbery (article), found herself charged with theft from employer (article) and only escaped justice as a result of complications surrounding the time frame in which the CPS must prosecute. Gareth Flowers, who helped Margaret with rent collection, managed to live in one of our properties rent free between August 2008 and July 2010. This was especially annoying as Gareth always convinced me he was a true friend.

Over the coming weeks I’ll be writing a number of blog posts on the failure of Smarter Housing, what I’ve learned from the experience and how you can avoid making the same mistakes: and it’s fair to say I made plenty

In the meantime, I’ll leave you this video of one of our student digs in Leamington Spa….

They say that we just learn from our mistakes,Because of sudden failure we became more stronger to face the reality that life sometimes is a failure.The best thing is we were able to overcome the burden and ready to stand again.

http://ceo.smartergroup.biz/adam-arnold-smartergroup-ceo/ AdamArnold

Hi Christina,

Thank you for your comments.

In this country it can be quite daunting to stand up and start again as our culture prefers to make an example out of failure rather than commending the original effort. If you’re going to comment on what went wrong, the focus really should be what can be learned from the experience.

Sadly, over a year after the company ceased trading I am still being hassled by ‘journalists’ looking for some kind of story and face various accusations on an almost daily basis.

For the time being, however, my new venture is going well – fingers crossed I really did learn from my previous mistakes and make a proper job of this one

Adam

Anthony

Hi Adam,

I’m just going to throw it out there, hope you don’t mind. Funnily enough, I have started a similar thing to what you did with Smarter Homes, would it be possible to have a chat some time? Maybe give me some tips and advice? On this or via email or something. Would be much appreciated.

Anthony

Anonymous

Hi Anthony,

If you’re happy to have the discussion in public, I’m more than happy to do so via the comments.

Hi, yes well how did you get landlords on board? any ways that you persuaded them that worked particularly well?

Anonymous

The hardest part was actually finding the landlords in the first place.

Before the company began trading I acquired a handful of landlords through friends who were renting private accommodation. My own landlord originally said ‘no’ as he had way too many properties to trust them to a start-up, however he signed up 2 years later.

On top of these I managed to grab a few landlords by collecting their details from ‘to let’ posters on the campus noticeboards.

Beyond September 2005 I never went looking for landlords – they simply came to us. People do business with people they like and giving a fantastic service helps. Don’t be tempted to compete on price, that’s a recipe for disaster!

Anthony

Thanks for this.
Give you give me an idea of your pitch when you spoke to a potential landlord either in person or on the phone? what do you think are the key factors that would make them decide to allow you to manage their properties?

My management fee structure is charged on a per tenant basis, as most of what we do will be technology driven we are able to keep costs down- online account areas for tenants and landlords etc.- less manning phone lines.

I am offering landlords a specialist student tenant find service where i market and source tenants. This does not involve taking the first months rent but does involve making sure the property is properly reserved by the tenant and deposits are paid and handed over to the landlord. Something else which the tenant must do online.

any thoughts on this?

Anthony

I am also in talks with a landlord who is going to live abroad and wants someone to manage his properties… how did u provide assurance and credibility and trust in the early days (obviously your character would have been one)

Anonymous

This is difficult without a track record. By the time I picked up Landlords who lived abroad I already had a year’s trading history. The fact it was a referral from a friend (the Landlord was a friend’s older brother) helped too.

Anonymous

Landlords are only really interested in two things:

- getting their rent on time; and
- not having to worry about the property.

On line stuff is good in theory but Landlords can be old fashioned and like to know there’s a person they can visit or call at the drop of a hat.

Do you have a website up and running yet? I’m happy to take a look and see if there’s anything I can suggest.

Scott Dawson

Hey Adam,

You didn’t fail, you lost focus and your trust was abused.

Hope you’re doing well mate.
Scott

http://ceo.smartergroup.biz/adam-arnold-smartergroup-ceo/ AdamArnold

Hello mate,

Thanks for your message

As you probably know I started another business, Smarter SEO, earlier in the year and I’m really pleased with how things are going.

There’s no losing focus this time around!!

Adam

Pete Uglow

Adam,

As you know I was one of your landlords and trusted the service you offered. As you know, I also ran another business that nearly went bankrupt. One of the things that I learnt from that experience was that as a result of my business decisions, I left some people out of pocket. I vowed to repay every single penny, for my own piece of mind and for my own continued reputation. I did that. Out of my near bankruptcy flourished anohter business. I built into that business, a repayment plan for all my old creditors. I paid them all off.
Unfortunately, I have started to get letters that are demanding money from me, as a result of the money your business took for my custom. I am now out of pocket. I wonder wether you would like to learn the lesson about paying off ALL creditors, or whether you want to potentially have a sullied reputation and run away from your repsonsibilities.
I’d be interested to know

When I founded Smarter Housing I began contacting Landlords who were advertising vacancies on noticeboards around the University of Warwick campus.

In many cases, Landlords were interested in the proposition I put forwards and were keen to sign up with Smarter Housing. Around two years passed before I first learned of the impact this had on Ken Harris, the current UWSU Welfare Officer.

Two completely independent Landlords contacted me at the start of 2008 to say they had been contacted by Ken Harris and been told to use any agent besides Smarter Housing. Both Landlords were from my “original” list of clients obtained from scouting the university campus.

As UWSU Welfare Officer, Ken Harris would routinely deal with 100s of students with accommodation enquiries. Advice given should be completely impartial, however it turns out some Landlords (including those mentioned above) had been paying Ken Harris between £50 and £100 if he sent them students who later took up a room.

From a Landlord’s perspective this makes sense – reward the person who is sending you business. However, taking money in this way is (as far as I am concerned) completely wrong for an “impartial” role such as UWSU Welfare Officer.

Given another chance I would have been on the Vice Chancellor’s doorstep. A less painful solution (i.e. one which wouldn’t have risked my business) would have been to pay Ken Harris directly but this isn’t something I would have considered.

However, I chose to ignore the issue (i.e. Ken Harris was livid at me for taking “his” fees) completely and this was a massive mistake on my behalf. Over the years, I heard from more than 50 students/tenants, parents/guarantors and property owners who had heard bad things about the company directly from Ken Harris and from this I have to assume he bad mouthed the company to more than ten times that number.

Before September 2009, this wasn’t a problem. Other letting agents in Coventry and Leamington Spa couldn’t compete with the high standards of students accommodation available at Smarter Housing. On top of this, we were still offering properties inclusive of broadband (and in some cases utility bills), weren’t charging letting fees (a rip off IMHO) and all tenants had access to special discounts at shops, bars and clubs in the local area.

Unfortunately, in September 2008 I ran into some real personal problems and stopped paying any attention to the day to day aspects of the business. In November 2009, Ken Harris e-mailed thousands of students telling them there were problems at Smarter Housing and they should avoid paying rent.

I found out about this in Spring 2010 when I returned to the business to find gaping holes in the company finances caused by non-payment of rent by our tenants. The e-mail was presented to me by one of six tenants who had been living (rent free) in the 6 (double bedroom with 3 en-suite) student apartment above our offices on 13 Spencer Street.

Within weeks all Landlords were made aware of our predicament. The solution was simple: act quickly to collect all rent shortfalls before the end of the current tenancy agreements (July 31st, 2010). Sadly, Ken Harris put the final nail in the coffin by posting a notice on the UWSU website citing Smarter Housing were insolvent and no tenants should pay the company rent under any circumstances.

The notice was quickly removed however the damage had already been done. Many students simply refused to pay rent on the advice given by Ken Harris – until such time they were dragged before the County Courts. Many paid rent to Landlords directly, although this simply prevented us from allocating the funds to the correct places.

Absolute codswallop. One of the worst student housing companies ever to have been established. If what you did was on a more major scale there would have been fraud charges brought.

Anonymous

Scale is irrelevant: charges would have been brought against me had fraud been committed.

The company was investigated by a firm of accountants, The Secretary of State’s fraud people and then the Insolvency Service.

I’ll take it as a back handed compliment that you think I could put £200,000 past all of the above.

For the record, of all the students who were approached re their rent shortfall, all bar 5 paid up after some chasing. Of those who had CCJs submitted, one paid up pre-trial; two are yet to attend trial; one lost in court and another escaped trial as paperwork wasn’t filed on time.

Feel free to prove otherwise, but I think you’ll find you are the one talking absolute codswallop.

S&J Estates

We still have a small number of student properties available for the 2012 – 2013 academic year. All of these are located in Royal Leamington Spa. For further assistance please call us on 01926 226 330 or visit our website: http://www.sjestates.uk.com/

S&J Estates (student letting)

We still have a small number of student properties available for the 2012 – 2013 academic year. All of these are located in Royal Leamington Spa. For further assistance please call us on 01926 336 220 or visit our website: http://www.sjestates.uk.com/

Ok Adam so how come a group of 4 who paid all there rent direct to smarter housings stated account (on time) for the whole 2009-2010 year. Had to spend a large part of their summer fighting to get the deposit back no small amount (£1200) of which you/your company (whatever state it was in at that point) provided absolutely no help with at all?

Anonymous

I regret my crystal ball is currently in for repairs so I will need you to provide some additional details if I am to confirm whether or not you did actually pay your rent and would thus be entitled to a deposit refund.

In any case, what help do you expect to get from a company that no longer exists? For someone who is presumably a Warwick graduate that part of your question seems rather stupid.

Guest

You miss my point. Thankfully our landlord paid up (as he is required to by law). After seeing proof from our bank that the money had indeed been transferred to your specified account. I don’t expect any help from a liquidated company so please don’t call me stupid.

My question was specifically; why did we not receive any help from you *at the time (2010)* or failing that even an open and honest admission of the problems. We rang and spoke to you personally on enough occasions…

While I accept if the money was stolen by your employees then it’s stolen and you are as mich a victim as everyone else was. And I also accept some students dishonestly took the company for a ride (although would you hand over money to a rumoured soon to be bankrupt firm?) You did little to portray yourself as being interested in helping those of us who had been honest. If you’d just said “the money was stolen. You’ll have to claim it from the landlord” that would’ve been far better then disregarding our concerns.

Anonymous

‘Anonymous’

I had absolutely no idea of any problems within the company until May 2010. Had you contacted me before this date you would have heard what I thought i.e. all is OK.

When payments to Landlords started bouncing I had a lot of angry customers on my door wondering why they hadn’t received rents between £1k and £45k. I then had two weeks of chaos trying to prove to clients that I hadn’t spent their money. If you had tried to contact me during this period I doubt you would have got through; I was glued to a PC screen with my mobile switched off trying to work out what the hell had gone wrong.

I spent the next few weeks contacting all tenants who owed any money. If students then paid up the company could have continued trading as if nothing had ever happened. It seemed likely that this would be the case and any contact during this time would have been met with the “all is OK” response.

Sadly, Ken Harris (the UWSU Welfare Officer) plastered a notice all over the union website stating that the company had gone bust and students shouldn’t pay rent under any circumstances, despite numerous Landlords asking him not to do this. This wasn’t actually true but it put the company to bed, as we effectively became insolvent overnight and had to cease trading. From this date you wouldn’t have been able to contact me as all lines of communication were cut off.

If you think you were mislead, you are mistaken. As far as I was concerned the company had a realistic chance of survival until Ken ‘backhander’ Harris stuck his beak in.

If you think I didn’t care, you are also mistaken. The whole reason behind the company was to make life easier for students renting accommodation and Smarter Housing certainly did that until such time that I took my eye off the ball. Even though you’re posting anonymously I’m fairly sure I know you were renting a three bedroom apartment on the way out to Warwick – the kind of accommodation that simply wouldn’t have been available to students a few years ago. This should also tell you just how few tenants had paid their rent if I can identify a property based on the deposit amount.

Finally, it wasn’t “lucky” the landlord paid up as I had forewarned clients that they would need to repay deposits for the few groups who were up to date on their rent.

Adam Arnold is a twenty(ish), father, and founder of the Smarter Group. He is a member of the Courvoisier Future 500, Entrepreneur in Residence at Wolverhampton University, a SPEED Plus mentor & Theo Paphitis #sbs winner.